S&P: New Calif. Budget a Mixed Bag

“If they use the excess revenue to pay off the existing debt burden, that would probably be beneficial for the state’s credit rating,” Petek says.

The governor had called for diverting $650 million more to pay down what he has called the “Wall of Debt.” But he compromised with legislative Democrats by diverting that money to help pay for his overhaul of the state’s education funding system instead.

S&P raised its credit rating for California from an “A-minus” to an “A” after Brown’s January budget proposal showed a surprise surplus.